In this article, we discuss the 8 best EV battery stocks to buy in late 2024 along with the latest updates around the lithium market and battery technologies.

Future of Lithium with M&A Activity and Regional Consolidation Trends

While lithium was down for a long time due to oversupply this year, it seems like the market is gaining back some interest in the metal as can be seen in recent M&A activity. The Australian mining giant Rio decided to acquire Arcadium for a healthy premium showing confidence in the future of the lithium market.

Romano Sala Tenna of Katana Asset Management discussed this in a CNBC interview and he sees continued growth opportunities in the Australian M&A market. It is driven by two key factors: it remains cheaper to acquire existing assets than to build new ones, and regulatory hurdles for new projects are increasing, causing delays.

On the global hunt for lithium, Sala Tenna discussed the competition, especially between China and other countries. He explained that China dominates the upstream processing of lithium, controlling the production of both spodumene and brine.

More importantly, China leads in the downstream processing, producing lithium chemicals for batteries, due to its technological edge and economies of scale. He sees Japan and South Korea trying to challenge China’s position but believes China will maintain its dominance.

Finally, Sala Tenna mentioned that more mergers and acquisitions are expected in important lithium-producing areas like Western Australia and South America, as these regions lead in global lithium production.

Read Also: 8 Best EV Penny Stocks to Invest in Now and 7 Best Auto Components and Parts Stocks to Buy Right Now.

Innovations in Battery Technology

While lithium batteries with graphite anodes seem to be the most widely used and known ones, innovations are happening to expand the battery industry in the EV market. According to a Markets and Markets report, The Future of Silicon Battery Industry: Innovations and Market Outlook, the silicon battery market is projected to grow significantly, increasing from $55 million in 2023 to $414 million by 2028, with a compound annual growth rate (CAGR) of 49.5%.

The growth is fueled by the adoption of next-generation lithium-ion batteries that use silicon anodes, which offer greater energy storage capacity and longer battery life. Geographically, North America, Europe, and Asia-Pacific are expected to lead the silicon battery market, supported by government policies, advancements in energy storage technology, and the rise of electric mobility.

Additionally, solid-state batteries have the potential to shorten charging times significantly, which could greatly improve consumer satisfaction and boost the demand for EVs. We mentioned this in our article about the best EV stocks for the long term, where we discussed CNBC’s conversation with Mark Fields. Here is an excerpt from the article:

“Fields suggested that automakers need to offer more affordable EVs and expand hybrid offerings while working towards breakthroughs in battery technology, especially solid-state batteries. These batteries could eventually reduce charging times to match the convenience of filling up at a gas station…

…He emphasized that while automakers are working on delivering low-cost EVs, the real game-changer will be the development of solid-state batteries, which could significantly improve charging times and consumer convenience.”

With that, we look at the 8 Best EV Battery Stocks To Buy in Late 2024.

Our Methodology

For this article, we used ETFs and screeners to identify nearly 30 EV battery stocks and narrowed our list to 8 stocks most widely held by institutional investors. The best EV battery stocks to buy in late 2024 are listed in ascending order of their hedge fund sentiment, which was taken from Insider Monkey’s database of 912 hedge funds.

Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).

8 Best EV Battery Stocks To Buy in Late 2024

8. Lithium Americas Corp. (NYSE:LAC)

Number of Hedge Fund Holders: 13

Lithium Americas Corp. (NYSE:LAC), a lithium exploration and development company, focuses on major lithium projects in North America, primarily the Thacker Pass project in Nevada’s McDermitt Caldera, which contains the world’s largest measured lithium deposit. Thacker Pass is seen as a critical growth driver for the company. It is supported by a $2.26 billion loan from the U.S. Department of Energy, the project highlights its importance for U.S. lithium independence.

In the initial phase, Thacker Pass aims to produce 40,000 tonnes of lithium carbonate annually, enough to power approximately 800,000 EVs per year. General Motors holds exclusive rights to Phase 1 production for up to ten years and is expected to complete an additional $330 million investment by the end of 2024, pending final arrangements.

Both companies have extended the investment deadline to explore alternative funding structures, with Lithium Americas (NYSE:LAC) agreeing to delay finalizing the second tranche until December 20, 2024, to allow for discussions on mutually beneficial terms.

With engineering and earthworks near completion, the full construction of Thacker Pass positions the company as a significant player in the global lithium market. Despite current lithium price fluctuations, the company expects prices to stabilize by the project’s expected operational launch in 2026.

Lithium Americas (NYSE:LAC) takes the 8th spot on our list of best EV battery stocks to buy in late 2024.

7. NIO Inc. (NYSE:NIO)

Number of Hedge Fund Holders: 20

NIO Inc. (NYSE:NIO) is known for its premium electric vehicles, battery-swapping technology, and Battery as a Service (BaaS) model, which lets customers subscribe to battery options separately from the vehicle price. Its lineup includes SUVs and sedans, including the ET9, expected in 2025. NIO’s battery-swapping stations allow fast battery replacements and health checks, while BaaS offers flexible upgrades.

In 2023, NIO (NYSE:NIO) introduced a 150 kWh semi-solid-state battery, extending vehicle range up to 930 kilometers (578 miles) per charge, combining solid-state energy density with lithium-ion practicality. NIO also develops new battery types, such as 4680 cells and lithium manganese iron phosphate (LMFP) batteries, to further improve energy efficiency and driving performance. The company operates in China and parts of Europe, with plans to expand globally.

On October 21, TipRanks reported that DBS analyst Rachel Miu reaffirmed a Buy rating for the company with a price target of HK$65 (HK$1 = US$0.13). The analyst mentioned strong indicators as it reported a 12% year-over-year sales increase in Q3 2024, totaling 61,800 units, and is projected to see 40% annual sales growth, showing an expanding market presence.

Moreover, NIO’s (NYSE:NIO) partnership with CYVN Holdings supports expansion into the Middle East and North Africa, lowering export tariffs. Miu’s positive outlook also considers the production ramp-up of the company’s new ONVO L60 model.

6. Sigma Lithium Corporation (NASDAQ:SGML)

Number of Hedge Fund Holders: 20

Sigma Lithium Corporation (NASDAQ:SGML) is a key player in the global EV battery market that focuses on lithium exploration and development in Brazil, especially for the EV sector. The company owns several properties in Minas Gerais, including Grota do Cirilo, Genipapo, Santa Clara, and São José, covering 185 square kilometers.

It received additional funding from Brazil’s Development Bank (BNDES) in August to expand production at Grota do Cirilo and secured a development loan of BRL 487 million (1 BRL = US$0.18) to fund its second Greentech Carbon Neutral Plant.

Sigma Lithium (NASDAQ:SGML) hosted its 2024 Investor Day on September 24 and highlighted a significant milestone in its production ramp-up. The company outlined plans to increase its industrial capacity to 125,000 tonnes per year of lithium carbonate equivalent (LCE) by 2026. The growth will come from two new production lines at the Greentech Plant, increasing capacity by 34,000 tonnes LCE by 2025 and 54,000 tonnes LCE by 2026.

Its strategy leverages economies of scale, subsidized financing, and a commitment to carbon neutrality. Recent investments aim to boost production by more than 10%, including monetizing stockpiled ore and implementing pre-screening steps to improve yields. The company projects an adjusted cash EBITDA of $420 million by 2025 and $700 million by 2027. This expansion is supported by the BNDES funding.

On September 16, Sigma Lithium (NASDAQ:SGML) shipped its 12th vessel of Quintuple Zero Green Lithium, which was its second sale to Mitsubishi, a major Japanese conglomerate that manufactures cars among other things. On October 23, the company announced its first shipment of 22,000 tonnes of Quintuple Zero Green Lithium to Abu Dhabi’s International Resources Holding (IRH).

The transaction reflects the company’s strategy to partner with entities that have strong financial backing. The price is provisionally set at 8.25% of battery-grade lithium carbonate’s market price at the shipment date.

In the third quarter, the company produced 60,237 tonnes of Quintuple Zero Green Lithium, surpassing its 60,000-tonne target and increasing production by 22% from the second quarter. The achievement is attributed to the efficiency of dense medium separation technology used at Sigma’s (NASDAQ:SGML) Grota do Cirilo operations.

5. Enovix Corporation (NASDAQ:ENVX)

Number of Hedge Fund Holders: 22

Enovix Corporation (NASDAQ:ENVX) is a California-based company specializing in advanced lithium-ion batteries, especially with its innovative 3D Silicon cell design. The design, which uses a fully active silicon anode, improves energy density and battery lifespan, and positions the company as a strong player in industries requiring high-performance batteries, such as EVs, mobile phones, and IoT devices.

In 2023, the company expanded its product offerings by acquiring Routejade, Inc., allowing entry into the conventional lithium-ion battery market for sectors like wearables and medical devices. The company collaborates with OEMs worldwide and generates revenue through battery sales and engineering contracts. It also has research labs in India and Malaysia and is developing next-generation materials.

On July 31, the company signed a non-binding Memorandum of Understanding (MOU) with a global automotive manufacturer to expand its unique cell architecture for EVs. This agreement centers on optimizing the company’s distinctive battery design, which uses a stacked electrode structure to improve performance, charging speed, and thermal management. Unlike traditional batteries, Enovix’s structure enables rapid charging, better thermal distribution, and minimized swelling

Enovix (NASDAQ:ENVX) has made strides in production, with its EX-1M battery cells receiving certification and sample shipments beginning from facilities in California and Malaysia. On October 2, the company announced that it has started shipping EX-1M battery cell samples from its Agility Line in Malaysia, representing a significant step in its scaling efforts.

This follows earlier shipments from its California facility and the opening of the high-volume Fab2 in Malaysia. The company also completed UN38.3 certification, which confirms the batteries meet international safety standards. Enovix (NASDAQ:ENVX) aims to begin high-volume production in 2025.

4. Rio Tinto Group (NYSE:RIO)

Number of Hedge Fund Holders: 29

Rio Tinto Group (NYSE:RIO) is a multinational mining and metals company. It is involved in multiple sectors, including copper, aluminum, diamonds, and lithium, making it one of the best EV battery stocks.

While the company already has significant lithium assets, it has planned to further expand its operations in the industry with the acquisition of Arcadium Lithium plc. On October 9, the company announced its plans to acquire Arcadium in an all-cash deal valued at $5.85 per share at approximately $6.7 billion.

Arcadium Lithium is recognized as a rapidly growing, vertically integrated producer of lithium chemicals, with an annual production capacity of 75,000 tonnes of lithium carbonate equivalent, and plans to more than double this by 2028. It is one of the major lithium suppliers of Tesla.

Rio Tinto’s (NYSE:RIO) CEO Jakob Stausholm emphasized that this acquisition aligns with the company’s long-term strategy to establish a strong lithium business alongside its existing aluminum and copper operations. Arcadium’s assets are expected to support significant growth in lithium production, contributing to a projected 130% capacity increase by 2028. The transaction is expected to close in mid-2025.

Bank of America Securities analyst Jason Fairclough sees significant potential for the company in light of this deal. On October 11, TipRanks reported that the analyst reaffirmed a Buy rating for Rio Tinto (NYSE:RIO) with a price target of 7,300.00 GBp. Fairclough views this deal as a strategic move to improve the company’s growth in the lithium sector.

He considers the deal’s valuation reasonable and noted the implied 6x EBITDA multiple for 2028 is consistent with Rio’s (NYSE:RIO) existing metrics. He pointed out that the stock is currently trading at about 0.7x net present value (NPV), which presents a compelling entry point for investors. The analyst believes the timing of the lithium acquisition is advantageous, especially as high-cost producers in China are cutting back on production, which may indicate a market stabilization.

3. EnerSys (NYSE:ENS)

Number of Hedge Fund Holders: 30

EnerSys (NYSE:ENS) specializes in energy storage solutions for industrial applications, designing and manufacturing a range of products, including motive power and specialty batteries, chargers, and outdoor enclosures. The company operates in over 100 countries and is structured into four segments: Energy Systems, Motive Power, Specialty, and New Ventures.

On September 20, the company announced it is in negotiations for a $199 million award from the U.S. Department of Energy (DOE) to support a lithium-ion cell production facility in Greenville, South Carolina. The funding is part of the Bipartisan Infrastructure Law, which aims to improve U.S. battery manufacturing.

EnerSys (NYSE:ENS)  plans to invest $615 million over four years to build a 500,000-square-foot plant that will create around 500 jobs and produce five-gigawatt hours (GWh) of lithium-ion cells annually for several applications, including commercial, industrial, and defense. An additional $50 million will go towards a specialized production line for the Department of Defense.

The company is also collaborating with European firm Verkor SAS to strengthen its manufacturing capabilities and domestic supply chain. It is expanding its focus on EV batteries and advanced energy storage technologies, producing high-performance batteries suitable for electric vehicles and industrial applications, such as electric forklifts.

2. Albemarle Corporation (NYSE:ALB)

Number of Hedge Fund Holders: 32

Albemarle Corporation (NYSE:ALB) is a major American specialty chemicals company that operates in lithium, bromine specialties, and catalysts. It is heavily involved in the global lithium market, especially for EV batteries. The company produces lithium carbonate and lithium hydroxide for battery applications, along with advanced solutions like lithium metal anodes and lithium sulfide to improve energy density and safety.

It is also working to increase its lithium production capacity, aiming to double lithium carbonate output by 2025. It is also developing the Kings Mountain mine in North Carolina to boost the domestic lithium supply. Partnerships with automakers such as Ford and BMW further strengthen its role in the EV sector, with long-term agreements for battery-grade lithium hydroxide.

On October 10, it was reported by TipRanks that DBS analyst Tina Ting Hu reaffirmed a Buy rating on Albemarle (NYSE:ALB) with a price target of $100. Hu’s positive outlook is based on the company’s potential growth in the EV market and energy storage sector, despite a recent drop in net income and sales forecasts.

The analyst highlighted that growth in the EV market, fueled by technological advancements and supportive government policies, is expected to drive higher demand for lithium, which is key to the company’s operations. The analyst also noted that several upcoming projects could lead to a 20% compound annual growth rate in sales volume by 2027. Additionally, the company’s tolling business expansion is expected to improve its ability to meet rising demand in the energy storage market. Hu also sees potential for Albemarle (NYSE:ALB) to improve its margins.

1. Tesla, Inc. (NASDAQ:TSLA)

Number of Hedge Fund Holders: 85

Tesla, Inc. (NASDAQ:TSLA) is the pioneer in EVs and has significant operations in the battery market and solar technology. The company is investing $3.6 billion in a new battery factory in Nevada to produce larger 4680 battery cells, which are crucial for the Cybertruck, requiring about 7 GWh of battery capacity each year.

As part of its vertical integration strategy, the company is also putting $1 billion into a lithium refinery in Texas, which will produce battery-grade lithium hydroxide using sustainable methods. The facility is projected to yield 50 GWh annually, improving the company’s battery supply chain and improving cost efficiency.

On October 23, Tesla (NASDAQ:TSLA) reported its earnings, beating the EPS estimates while missing the revenue forecasts. The company reported an EPS of $0.72, up from $0.66 in the same quarter of last year, and exceeded the forecasts by $0.12. The revenue of $25.18 billion missed the estimates by $490 million but was still up 8% year-over-year. Moreover, the company’s free cash flow was up over 223% at $2.74 billion.

Tesla’s (NASDAQ:TSLA) cost of goods sold (COGS) per vehicle fell to a record low of approximately $35,100. Moreover, the company’s Megafactory in Lathrop produced 200 Megapacks (large-scale rechargeable lithium-ion battery stationary energy storage product) in a single week. Powerwall deployments set a new record for the second consecutive quarter as it ramped up production of Powerwall 3. In the third quarter, the Cybertruck ranked as the third top-selling electric vehicle in the U.S., following the Model Y and Model 3.

READ NEXT: 8 Best Wide Moat Stocks to Buy Now and 30 Most Important AI Stocks According to BlackRock.

Disclosure. None. Insider Monkey focuses on uncovering the best investment ideas of hedge funds and investors. Please subscribe to our daily free newsletter to get the latest investment ideas from hedge funds’ investor letters by entering your email address below.